All investment categories, vehicles in positive territory
WATERLOO, ON, Oct. 6 2009 – Canadians are growing more positive about a wide range of investments amid the current economic news, according to a national poll for Manulife Financial, Canada’s leading insurance and wealth management company.
For the third straight quarter, the overall Manulife Investment Sentiment Index registered a strong gain, while eight of 10 investment categories and vehicles rose in the latest quarterly poll for Manulife in mid-September.
The 43rd quarterly index gained five points to reach +25, the first time it has been higher than levels before the recent recession. The latest survey reflects a sharp increase from last December, when the index hit its lowest point in a decade at plus five, then recovered six points in March and another nine in June.
“Canadians appear to be more optimistic about a range of investments this fall, after leaning toward safer havens earlier this year,” said Paul Rooney, President and CEO, Manulife Canada. “Stocks and investment funds generally seem to be regaining favour.”
Among 10 investment categories and vehicles, stocks and Registered Retirement Savings Plans showed strong gains in the national telephone poll of 1,000 Canadians by Research House, an Environics Company.
“The past year has been volatile for many Canadians and we always encourage investors to work with an advisor and stick to a plan. That helps them stay focused on their goals, plus balance their various types of investments,” Mr. Rooney added.
Manulife serves more than one in five Canadians with a wide range of financial services and products and one of our key goals is to help them make better financial decisions, he said.
Since its launch in 1999, the Manulife Investor Sentiment Index has remained in positive territory overall. It peaked at +35 in early 2000, but fell to +11 in December 2001. During the past several years, the index had generally remained near six-year highs, above +20. But it suffered a sharp drop a year ago and again in December, to hit an all-time low of +5.
The quarterly index monitors how Canadians say they feel about investing in 10 different categories and vehicles. The index reflects the percentage of those who say they believe it is a good or very good time to invest minus those who feel the opposite.
Investment categories gain ground
Highlights this quarter include a rebound for stocks, which showed the biggest swing followed closely by Registered Retirement Savings Plans.
After some wild moves earlier this year, investment property and investing in their own homes remained relatively stable this quarter. Principal residences still remain the most popular investment category – with a wide lead over every other area.
The Manulife Investor Sentiment Index is based on the following six investment categories, shown by order of their overall ranking in the survey.
- Investing in their own homes (either through renovations or paying down the mortgage) remains the most popular place for Canadians to put their money – a consistent finding since 1999. The index for investing in their own home rose a single point in September to +57. The index reflects 66 per cent of those surveyed who said it’s a good or very good time to invest in their own residence — minus nine per cent who believe it’s a bad or very bad time. The remainder are undecided.
- Investment real estate held its lead over cash and fixed investments by gaining three points in September, after several strong recent gains. Investment real estate, at +40, quickly rebounded from negative territory in December, which it had seen only twice since the survey began.
- Cash (including savings accounts) and fixed income investments (including GICs and annuities) were tied as the third most popular place to put money, at +18. Over the longer term since 1999, cash traditionally had been the least preferred place named by Canadians to leave their money. Then it recently showed a sharp rise since late last year, as other markets fell out of favour.
- Balanced funds climbed further from negative territory to hold fifth place among the most-popular investment targets, gaining six points in September. A year ago, balanced funds showed a sharp 33-point decline. Resting at +14, the latest index for balanced funds reflects 38 per cent who felt they are a good or very good place to invest, compared to 24 per cent who said the opposite in September.
- After dropping back sharply last October, equities gained nine points to rest at plus one, the last category among the 10 to pull out of negative territory in the survey. The stocks index reflects 34 per cent who said it’s a good or very good time to invest in stocks, either directly or via mutual funds, while 33 per cent saw equities as a bad or very bad choice. Another 24 per cent felt it’s neither a good or bad time to buy shares.
As well as evaluating the six investment categories, the same question was asked of four investment vehicles.
- Registered Education Savings Plans held onto top spot among favourite vehicles in June, at +46 in this latest poll. Some 57 per cent of those surveyed said now is a good time to invest, compared to 11 per cent who disagreed.
- Among Canadians’ traditional favourite investment vehicles, Registered Retirement Savings Plans regained some ground in June, adding eight points from the previous poll. At +41, the latest results for RRSPs reflect 57 per cent of respondents who feel it’s a good or very good time to put money into an RRSP, while 16 per cent said they feel it is a bad or very bad time.
- Segregated funds held steady this quarter, to keep their lead over mutual funds at +16. Segregated funds were favoured by 37 per cent of respondents, while 21 per cent leaned the opposite direction.
- At plus seven, the index for mutual funds gained seven points in September after regaining 13 points in June, following a small gain in March and severe declines last December and October, when the index suffered a 31-point drop. The latest mutual fund index reflects a balance between those who favor and dislike mutual funds – 34 per cent say now is a good or very good time to invest in mutual funds, while 27 per cent considered it a bad or very bad time to invest in mutual funds. Another 28 per cent felt it was neither a good or bad time for funds or did not know.
The poll by Research House was conducted with 1,000 Canadians aged 18 and older between September 16 and 25, 2009. The results have a margin of error of +/- 3.1 percentage points, 19 times out of 20.
Manulife Investor Sentiment Index
About Manulife Financial
Manulife Financial is a leading Canadian-based financial services group serving millions of customers in 22 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were Cdn$421 billion (US$362 billion) as at June 30, 2009.
Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘945’ on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com.